February 8, 2015

President’s suggestion that Bank Asya bankrupt denied by BDDK

Ali Aslan Kılıç

An important reservation is being made to a strong statement on the history of banking that is in economy textbooks used in colleges. Anywhere in the world, speculation about banks causes enormous panic that depositors will try to withdraw their money, pushing a bank to the brink of collapse. Maybe the only exception to this general rule is Bank Asya. A smear campaign has been carried out against Bank Asya for months, a target of revenge for what the government says was a role in the Dec. 17 and 25, 2013 corruption and bribery investigations. Public institutions were told to withdraw their deposits and businessmen were also warned to do the same. The withdrawal of money was also reported in the media to cause general panic.

However, the political administration's move backfired. The customers of Bank Asya showed their decisiveness to protect their bank; they continued to deposit more money. And because of this, the government's plan to sink Bank Asya did not work.

Meanwhile, Bank Asya's attempt to form a partnership with Qatar Islamic Bank was blocked in August of last year. President Recep Tayyip Erdoğan's advisor Yiğit Bulut denied Deputy Prime Minister Ali Babacan's statement that Ziraat Bank would acquire Bank Asya. Bank Asya's transactions at the stock exchange were also blocked. President Erdoğan even argued that Bank Asya went bankrupt.

Erdoğan, who belittled the people trying to ensure the bank's survival, argued that that bank had already gone bankrupt and thus these efforts were useless. Four months have passed since this allegation but Bank Asya, one of the strongest banks in terms of capital ratio, still survives. A number of provisions and rules spelled out in the Banking Law, including Article 74 on the protection of the image and prestige of the banks, were publicaly violated. The finance sector was put into a risky situation by the manipulation of Bank Asya but the Banking Regulation and Supervision Agency (BDDK) and the Capital Market Board (SPK) did nothing.

The BDDK, which assigned the TMSF as the new management of Bank Asya temporarily last week, actually denies President Erdoğan's statements. If Erdoğan's allegation that the bank had already gone bankrupt was taken seriously, the bank should have been confiscated under Article 71 of the Banking Law. However, only the management rights were seized -- illegally -- by reference to Article 18 of the same legislation.

A smear campaign was conducted against Bank Asya and at the same time written motions were deliberated in Parliament on this matter. CHP Istanbul Deputy Mutu Oran's first question in a motion on Feb. 5 was, “Did President Erdoğan order the confiscation of Bank Asya's management rights?” Oran filed similar motions on developments related to Bank Asya in August and September 2014 as well. However, Deputy Prime Minister Ali Babacan was unable to respond to these questions.

Bank Asya is still alive despite speculation by some circles, including President Erdoğan. And the bank's customers are making history. Regardless of what the managers appointed by the state do, experts agree that Bank Asya will win its legal struggle.

The state has failed to dent the reputation of Bank Asya, on the contrary the bank's prestige has increased, while those who try to sink Bank Asya suffer from a worsening image in the public eye.

Published on Sunday's Zaman, 08 February 2015, Sunday